What is planned?
The draft law "On Leasing Activities" is being prepared for the second reading in the House of Representatives.
Deputies want to limit leasing overpayments: the law will specify how much a leasing organization can add above the cost of an asset, depending on whether the term is over or under a year.
"At the level of the National Bank, penalties for non-fulfillment of obligations will be limited, so that people do not fall into financial bondage with excessive fines. The draft law provides time to fulfill obligations due to life circumstances.
Leasing of housing and houses on land is simplified — previously there were issues with the land plot."
— said Roman Brodav, Chairman of the Standing Commission of the Council of the Republic on Economy, Budget, and Finance, writes BelTA.
The draft law enshrines the emergence of secondary leasing.
"This is when a leased item is acquired, transferred to the lessee under leasing terms, and then, by agreement or due to circumstances, returned to the lessor. The lessor then faces the question: what to do with this property? Because its goal is not to own it, but to finance the transaction and transfer the property to the lessee.
If the property is returned, the lessor needs to sell it. Given the specifics of equipment or machinery, this is not always simple. Secondary leasing allows this property to be re-transferred to a new lessee for possession and use, including with the possibility of subsequent repurchase,"
— explained Alexander Dzyadkov, Head of the Methodology Department for Non-Bank and Investment Operations of the Main Department for Regulation of Non-Credit Financial Organizations and Investment Operations of the National Bank.
What will this give to leasing organizations and lessees? For leasing organizations, it will ensure the financial component of their activities, i.e., financing the acquisition and transfer of property. For lessees — greater flexibility.
For example, operational leasing, as it's called in Belarus, is very popular in Europe.
"It ends not with the purchase of the leased item, but with its return to the lessor. For example, everyone wants to have a good car and update it as new models are released. Accordingly, one can conclude an agreement with a leasing organization: a businessman orders a car, the leasing company acquires it and leases it for 2-3 years. At the end of the term, the old car is returned to the lessor, and the client takes a new one on the same terms. The returned car is then transferred to another lessee at a significantly lower price.
The appeal for the second lessee is that leasing organizations, as owners, strictly control the condition of the property. They monitor its preservation, maintenance, and order," Alexander Dzyadkov noted.
Such a tool will allow well-off citizens and enterprises to lease new property, and less well-off ones to lease used property. In Kazakhstan, Kyrgyzstan, and Armenia, secondary leasing is enshrined in law, is used, and is considered standard. Therefore, the National Bank insisted: it is also necessary in Belarus.
The draft law also provides for the National Bank's powers to establish a risk management system in leasing organizations.
What else is planned?
There are maximum sizes for the excess of leasing payments over the cost of the leased item — by analogy with the limitation of loan rates. Currently, this is no more than twice the cost of the leased item for contracts over one year, and no more than once for contracts up to one year. These amounts are planned to be halved: the excess should not be more than the single cost of the leased item for contracts over one year, and half the cost for contracts up to one year.
The National Bank will be authorized to determine the maximum size of remuneration for contracts with individuals.
Comments